MEDICARE PLANS

Medicare Part D

Drug programs that help pay for the high costs of prescription drugs

Medicare Part D is prescription drug coverage. This helps cover the cost of prescription medications and can protect you from high drug costs.

These plans are offered by private insurance companies that are approved by Medicare.

  • You’re eligible for a Part D plan if you are enrolled in:
    • Medicare Part A, Part B, or both

How Do I Get Medicare Prescription Drug Coverage (Part D)?

You have two ways to get Medicare Part D coverage:

  • Buy a stand-alone Part D plan (PDP):
    • This is a separate drug plan you can add if you have Original Medicare (Part A and/or B).
    • Most people who choose a Medicare Supplement (Medigap) plan also buy a stand-alone drug plan, since Medigap does not include prescription coverage.
  • Get it through a Medicare Advantage Plan (MA-PD):
    • Many Medicare Advantage Plans (Part C) include prescription drug coverage.
      • These are called MA-PD plans.

How Do I Know If My Drugs Are Covered?

Each Medicare Part D plan has a list of covered drugs called a formulary.

Here’s how it works:

  • The formulary is organized by drug type or category (like heart medications, diabetes drugs, etc.).
  • Each drug is placed into a tier—usually from Tier 1 (lowest cost) to Tier 5 (highest cost).
  • The tier your drug falls under determines how much you’ll pay (your copay or cost share).

Important: Not all plans cover the same medications. Let us help you find a plan that includes your prescriptions—we’ll review your medications and match you with a plan that fits your needs.

More Important Information About Medicare Part D

  • You may qualify for Extra Help from the government if your income is below a certain level. This can reduce your monthly premiums, deductibles, and copays.
  • Monthly premiums vary by plan, and higher-income individuals may pay more.
  • You can choose to have your Part D premium automatically deducted from your Social Security or Railroad Retirement Board check.
  • If you don’t enroll when first eligible and don’t have creditable drug coverage (like from an employer), you may have to pay a late enrollment penalty.
  • You can’t have both a Medicare Advantage Plan (Part C) and a separate Part D plan at the same time—unless your Advantage plan doesn’t include drug coverage.
  • Drug plan formularies can change every year, so it’s important to review your plan annually to make sure your medications are still covered.
  • You can change, add, or drop your Part D plan each year during the Open Enrollment Period (October 15 – December 7).

The 3 Coverage Stages of Medicare Part D

If you have a Medicare Part D plan, your prescription drug costs may change throughout the year based on which coverage stage you’re in.

In 2025, these stages are:

Starts: With your first prescription of the year

You pay 100% of your drug costs until you reach your plan’s deductible.

If your plan has a $0 deductible, you skip this stage.

Some deductibles only apply to certain drug tiers, so you may not owe anything if your medications aren’t on those tiers.

Premium payments do not count toward the deductible.

Starts: After you’ve met your deductible, or immediately if you have no deductible

Your plan pays a portion of each prescription, and you pay the rest (either a flat copay or a percentage—coinsurance).

What you pay depends on your drug’s tier.

This stage ends once your total drug costs (yours + the plan’s portion) reach $2,000 in 2025.

Starts: When your out-of-pocket costs for covered drugs reach $2,000

Once you hit that cap, you’ll pay $0 out-of-pocket for covered medications for the rest of the year

This includes payments you made and any help you received (like from the Extra Help program)